Seattle ranks 23rd in population among the nation’s big metropolitan areas, and the city continues to grow. In fact, Seattle boasts more construction projects of residential units than any other U.S. city with the exception of Houston, reports The Seattle Times.

Last week’s 2013 State of Downtown Economic Forum of the Downtown Seattle Association reviewed the city’s priorities for developing a region that continues to support both economic and residential growth. Association President and CEO Kate Joncas shared the following:

“We’re moving in the right direction, but we must continue to develop an environment which attracts and nurtures this growth. We need to ensure that downtown is family friendly, which includes developing a downtown public school and rezoning South Lake Union to support the kind of density that will attract families….We have an obligation to ensure that we’re taking a smart approach to our advantages over suburban areas – steps like improving the pedestrian experience, preserving transit and making downtown Seattle the region’s preferred destination to live, work, shop and play. These are top priorities.”

Seattle remains the most populous city within King County, according to Seattle.gov. The city’s 2010 population of 608,660 indicated net growth of about 8 percent since the 2000 census number. One-third of total residents were between the ages of 18 and 34, highlighting the fact that Seattle has the ability to attract young talent.The Seattle-Tacoma-Bellevue area is the 15th most populous metro region in the U.S.

January home sales held steady and may indicate that a seller’s market is emerging, reports the National Association of Realtors. Total existing home sales went up 0.4 percent to a seasonally adjusted rate of 4.92 million, up 9.1 percent from the January 2012 level of 4.51 million units. Home prices continue to rise above last year’s levels, and sales are up in all regions except for the West, where inventory is tighter.

Total housing inventory at the end of January dropped 4.9 percent to 1.74 million existing homes on the market, or a 4.2-month supply. This marks the lowest supply rate since April 2005. NAR chief economist Lawrence Yun said that “buyer traffic is continuing to pick up, while seller traffic is holding steady.”

The number of available homes for sale is lower than the six-month supply considered to be typical of a balanced market, reports Forbes. But some experts like Stuart Hoffman, chief economist at PNC Financial Services Group, cautions against using the term “seller’s market” to sum up current housing activity. “I don’t think it is a seller’s market yet but I do think we are getting back to a more balanced market where it’s no longer simply a buyer’s market.” According to Business Insider, Bank of America economist Michelle Meyer sees a market opportunity for new construction and existing homes to add to inventories and offset undue pressure on home prices.

The national median existing-home price for all housing types was $173,600 in January, up 12.3 percent from January 2012, making the 11th consecutive month of year-over-year price increases. Distressed transactions comprised 23 percent of January sales, down from 24 percent in December and 35 percent in January 2012. And the national average commitment rate for a 30-year conventional, fixed-rate mortgage rose slightly to 3.41 percent in January from a record low 3.35 percent in December.

One of the most interesting revelations of the latest National Association of Realtors (NAR) Existing Home Sales Report is the shortage of housing inventory being reported throughout much of the country. At the same time, buyer demand is dramatically up over last year. Here are some key points:

Total housing inventory at the end of January fell 4.9 percent to 1.74 million existing homes available for sale, which represents a 4.2-month supply at the current sales pace.

This represents the lowest housing supply since April 2005 when it was also 4.2 months.

Listed inventory is 25.3 percent below a year ago when there was a 6.2-month supply.

Raw unsold inventory is at the lowest level since December 1999 when there were 1.71 million homes on the market.

What Does This Mean if You Are Selling a Home?

The price of anything is determined by supply and demand. According to NAR’s report, inventory is at its lowest level since the real estate boom eight years ago. At the same time, demand is up. Lawrence Yun, NAR chief economist, reveals:

“Buyer traffic is continuing to pick up, while seller traffic is holding steady. In fact, buyer traffic is 40 percent above a year ago, so there is plenty of demand but insufficient inventory to improve sales more strongly. We’ve transitioned into a seller’s market in much of the country.”

Does that mean you should sell your house now? Or should you wait to see if prices increase? Nobody knows for sure. However, some feel that there may be a pent-up inventory about to come to the market because, as prices increase, it will free up some sellers who have been locked in a negative equity situation (where the house is worth less than the remaining mortgage).

The Zillow Negative Equity Forecast predicts:

“The negative equity rate among all homeowners with a mortgage will fall to at least 25.5 percent by the fourth quarter of 2013, freeing more than 999,000 additional homeowners nationwide.”

If these homes come to market, the supply/demand ratio will begin to balance out and lessen the opportunity a seller now has.

“With the low level of inventory, both in absolute numbers and as a month-of-supply, and the recent price increases in some areas, it would seem likely more inventory would come on the market.”

Lawrence Yun agrees:

“We expect a seasonal rise of inventory this spring.”

Yet, Yun is quick to add:

“It may be insufficient to avoid more frequent incidences of multiple bidding and faster-than-normal price growth.”

Probably the most interesting comment on this comes from Calculated Risk:

“I need to think about this…This will be an interesting issue all year.”

This is an issue that is important to every seller. Make sure that you are working with a true professional that is dedicated to keeping current on what matters in the real estate market so he/she may provide you with the best advice possible as this situation becomes clearer.

Freddie Mac reports that residents of apartment communities that include five or more rental units currently make up 15 million U.S. households — a figure that is expected to climb with shifting demographics and housing preferences.

Such factors as demographic trends, household formations, and higher credit standards for home loans are driving the increase in rental housing, notes Freddie Mac senior vice president of multifamily David Brickman. At the same time, though, affordable rental housing is becoming more elusive in certain parts of the country because of gross rent, or rent plus resident-paid utilities.

More than half of all people who rent spend more than 30 percent of their income on housing — an increase from 40 percent in 2000. Low-income households tend to spend even larger portions of their incomes on rent, based on the U.S. Census Bureau’s American Community Survey 2000-2011.

There’s no question about it, the operative theme of the 2013 housing market is restricted supply. Ever since the bubble burst in 2006, we’ve been hearing about the dangers of over supply, of the massive “shadow inventory” out there. Yet we’re living in a vastly different reality. There are 40% fewer homes on the market now than there have been during February in the last few years.

Inventory of actively for sale homes. Single Family Homes. Altos 20-city (national) composite. Data as of February 22, 2013. Source: Altos ResearchMid-January typically marks the seasonal low of available housing inventory. The fewest homes are on the market after the holidays. But pretty quickly they start coming on the market to prepare for spring. Inventory gets added until the first week of July, when people start looking forward to the Autumn.

You often hear about a house being really well built, and that was definitely the case with this remodeled 1908 Craftsman. But “well built” and “well laid out” are two entirely different things. “The whole way it was set up prevented you from having any connection to the view over Ballard, a really cute neighborhood in Seattle,” says architect and designer Charlene Wilson, of Portal Design, “or any connection whatsoever to the backyard.”

Wilson says that a lot of the inspiration for the house came from the lifestyle in Palm Springs, California. The homeowners have a vacation house there, and Wilson spent time with them in the desert and went to events during the city’s annual Modernism Week.

One of the things they all love about Palm Springs is the ability to live indoors and out, not something you can typically do in Seattle. “The sense of being able to flow from indoors to outdoors was one of the main drivers in renovating this house,” says Wilson.